Choose with care

Whether you are an associate looking to buy your first practice or a partner looking to retire there are a number of fundamental aspects to consider.

Buying

The approach will differ depending on whether the practice has been structured as a limited company or a partnership/sole trader. In the case of the former you will be buying shares (unless this is open to negotiation) and in the latter you are purchasing the trade and assets.

If you have a practice in your sights the first step should be to speak to your accountant. Unless you have liquid funds available it is likely you will have to borrow money to finance the purchase.  Your accountant should be able to help you approach funders with an outline proposal. The banks will generally require a number of documents such as financial projections, a business plan, statements of your assets and liabilities and a CV. Again, your accountant will be able to help you prepare these documents. As banks are lending on an intangible asset, goodwill, they need to be satisfied the lending is, from their perspective, secure.  Fortunately, even in the current climate, dentists tend to be seen as a reasonably good credit risk. However, banks are unlikely to lend 100 per cent of the required funds so will expect you to share the risk by contributing some of your own capital.